Construction Law Update: High Court Identifies Basis On Which To Defend Call On Performance Bond

In Gembira Ltd ("plaintiff") v Amtrust Europe Ltd ("defendant") [2024] IEHC 188, a construction contract between the plaintiff and a contractor was terminated when an interim examiner was appointed to the contractor. The plaintiff applied for summary judgment in an amount of €1,360,735 pursuant to a performance bond issued in 2017.

The contract was an amended RIAI form of contract. Clause 33 provided that, if an examiner was appointed to the contractor, the plaintiff could terminate the employment and employ and pay another contractor to complete the works (and this happened). After completion, the contract architect would certify the amount of the expenses incurred by the employer to completion. Clause 33(c)(iv) provided that if that amount, added to the money paid to the original contractor before termination of the contract, exceeded the amount which would have been payable on due completion of the contract, the difference would be a debt payable to the employer